Mr. Eli Dadouch reports

FIRM CAPITAL MORTGAGE INVESTMENT CORPORATION ANNOUNCES Q1/2023 RESULTS, AS WELL AS THE DECLARATION OF JULY, AUGUST, AND SEPTEMBER MONTHLY CASH DIVIDENDS

Firm Capital Mortgage Investment Corp. has released its financial statements for the three months ended March 31, 2023.

Net income

For the three months ended March 31, 2023, net income increased by 10.8 per cent to $8,711,897, as compared with $7,861,540 reported for the same period in 2022. The increase is primarily a result of a higher average interest rate on the corporation's investment portfolio (March 31, 2023 -- 11.15 per cent, versus March 31, 2022 -- 8.05 per cent).

Earnings per share

Basic weighted average profit per share for the three months ended March 31, 2023, was 25.3 cents, as compared with the 23.2 cents per share reported for the three months ended March 31, 2022.

Portfolio

The corporation's investment portfolio decreased by $9.2-million to $651.8-million as at March 31, 2023, in comparison with $661.0-million as at Dec. 31, 2022 (in each case, gross of impairment allowance, fair value adjustment and unamortized fees). During the first quarter of 2023, new investment financing was $41.6-million (2022 -- $116.8-million) and repayments were $50.7-million (2022 -- $144.7-million). On March 31, 2023, the investment portfolio comprised 254 investments (2022 -- 252). The average gross investment size was approximately $2.6-million, with 13 investments individually exceeding $7.5-million.

Prudent impairment allowance

Management has always taken a pro-active approach to the corporation's loan impairment allowance. This is a prudent approach that provides stability of dividends to the company's shareholders in the event there are any future issues with any of the loans within the corporation's investment portfolio. The allowance for impairment and fair value adjustment as of March 31, 2023, was $13.66-million (2022 -- $10.16-million), comprising: (i) $4.20-million (Dec. 31, 2022 -- $3.70-million) representing the total amount of management's estimate of the shortfall between the investment balances and the estimated recoverable amount from the security under the specific loans; (ii) $4.70-million (2022 -- $4.70-million) representing the total amount of management's estimate of fair value adjustment on an investment stated at fair value through profit or loss; and (iii) a collective allowance balance of $4.76-million (2022 -- $1.76-million).

Investment portfolio details

Details on the corporation's investment portfolio as at March 31, 2023, are as follows:

• Total gross investment portfolio of $651,813,815, which is lower by 1.4 per cent than the $661,003,596 reported at Dec. 31, 2022;
• Conventional first mortgages, being those first mortgages with loan to values less than 75 per cent, comprise 83.0 per cent of the total portfolio (83.5 per cent as at December, 2022), and total conventional mortgages, with loan to values less than 75 per cent, comprise 88.3 per cent of the total portfolio (88.6 per cent as at December, 2022);
• Approximately 61.8 per cent of the portfolio matures by Dec. 31, 2023;
• The average face interest rate on the portfolio is 11.15 per cent per annum, as compared with 8.05 per cent at March 31, 2022;
• Regionally, the mortgage investment portfolio is diversified as follows: Ontario (85.1 per cent), Quebec (8.2 per cent), Western Canada (3.6 per cent) and the United States (3.1 per cent).

Cash dividend distribution

The corporation is pleased to announce that its board of directors has declared a monthly cash dividend of 7.8 cents per common share (subject to adjustment at the discretion of the board of directors), payable on each dividend payment date set out in the attached table, to holders of common shares of record at the close of business on each record date set out in the attached table.

Dividend and share purchase plan

The corporation has in place a dividend reinvestment plan (DRIP) and a share purchase plan that are available to its shareholders. The DRIP allows participants to have their monthly cash dividends reinvested in additional shares. The price paid per share is 97 per cent (if the share price is higher than $14.85) of the weighted average trading price calculated five trading days immediately preceding each dividend date with no commission cost. Once registered with the share purchase plan, participants have the right to purchase additional shares, totalling no greater than $12,000 per year and no less than $250 per month. Shareholders participating pay no commission.

For the three months ended March 31, 2023, the corporation declared dividends on its common shares totalling $8,069,798 or 23.4 cents per share, versus $7,940,890 or 23.4 cents per share, respectively, for the three months ended March 31, 2022. The number of common shares outstanding at March 31, 2023, was 34,486,560, as compared with 34,482,286 at March 31, 2022.

The corporation, through its mortgage banker, Firm Capital Corp., is a non-bank lender providing residential and commercial short-term bridge and conventional real estate financing, including construction, mezzanine and equity investments. The corporation's investment objective is the preservation of shareholders' equity, while providing shareholders with a stable stream of monthly dividends from investments. The corporation achieves its investment objectives through investments in selected niche markets that are underserviced by large lending institutions. Lending activities to date continue to develop a diversified mortgage portfolio, producing a stable return to shareholders. Full reports of the financial results of the corporation for the year are outlined in the audited consolidated financial statements and the related management discussion and analysis of the corporation, available on SEDAR. In addition, supplemental information is available on the corporation's website.

We seek Safe Harbor.